Question of the Week: Excess Mileage Charge

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Robert Canon of Carlisle asks “I’ve recently sent my car back and have received a large bill for excess mileage, I have done over 4,000 miles over my contract. I sent the car back in perfect condition and with a full tank of fuel, surely this means they can make more on the car and forget about the mileage. I find the excess mileage quite scary and wasn’t informed of this at the beginning”

Answer

Thank you for sending in your question Robert, along with your contract and details of your car. Let’s have a look at this as a whole.

Before Taking the Car

The company that provides your car subscription is well established, their website seems to be quite informative and states the mileage that comes with the vehicle, and excess mileage charges should you go over along with a guide on how they expect the car to be returned.

Looking at Wayback Machine, whilst the website doesn’t show the exact deal you had due to the capture date, I can see from older archives that the information displayed has not changed much and the company clearly displays:

  • Vehicle Make/Model
  • Minimum Term Required to get advertised rate
  • Mileage per month included
  • Excess Mileage Charge
  • Return Conditions
  • Maintenance Details
  • Further Contract Information

If anything, this provider has provided over and above the information required to undertake a car subscription and have confidence in what they are supplying.

Order Form

Before committing to the vehicle subscription, the supplier sent you out an order form which displayed the vehicle details, delivery date, costings, agreed mileage, term, deposit and excess mileage. You agreed to this and this was accepted by the supplier.

Contracts

Whilst any contract might seem scary due to the amount of words, this company provided you with the relevant details on page one. This mirrored the order form in terms of the vehicle, pricing, excess mileage and agreed mileage.

During the contract

During the contract, you told me that the company had been in touch twice for a mileage reading. THe first one you ignored as you agreed you were quite a way over the mileage and you didn’t want a bill, the second one was supplied which was still over by around 3,000 miles.

The subscription provider gave you an option to increase your mileage which equated to a rate per mile much less than the excess mileage allowance. From the email correspondence you supplied, you declined this offer explaining that you would be able to “bring your mileage around to what it said on the contract.”

End of contract

At the end of the contract, you sent your car back to the provider. This was collected from your work address and you paid the collection charge. At the point of collection and based on the number of days you had the vehicle, you had 4,422 miles of excess mileage at a charge of 64p plus VAT per mile. This gave you a bill of £2,830.00 + VAT (£3,396.10 inc. VAT).

You were not charged for any damage on the vehicle despite 2 of the alloys which were marked as damaged and your car was filled full of fuel. The supplier asked you to return the car with 1/4 of a tank as per their check-out sheet, this was sent to you by their administrator so that you didn’t overfill your vehicle.

You did tell me that you had filled the car up as a gesture of goodwill as you knew that the vehicle was over mileage.

Final Invoice

When you were sent the final invoice for the excess mileage, you replied immediately saying that you disputed the calculation and that the charges had been excessive as you sent the car back in “showroom” condition and it had a full tank of fuel.

You also said that the company had billed you the mileage from your collection point to their fleet centre. When this was queried, you had worked out that the car had in fact done an additional 203 miles on top of the mileage to the fleet centre, which was 80 miles away from your address.

The supplier came back and explained that the off-hire mileage had been calculated at the point where the car was handed over to the delivery agent. The car was then used to ferry other drivers from job-to-job to help with logistics and this was standard in the industry, we agree this is.

The calculation used to work out your mileage was correct, they worked out your excess mileage using the following formula:

Monthly Mileage x 12 Months ÷ Number of days on hire

We can confirm that our workings of the agreement correctly works out your excess mileage charge to be 4,422 miles and that your bill was £3,396.10 including VAT.

Our thoughts

Whilst we understand that your feelings towards this are that you have sent a vehicle back in excellent condition with a full tank of fuel, you didn’t adhere to the contracted mileage and incurred the charges correctly.

As you have used a short-term product, the excess mileage charges are higher as the value of a new car when delivers drops significantly during the first year of ownership. Excess mileage rates for car subscriptions as an industry standard can be anywhere between 30p per mile to £3.75 per mile on some of the higher-end vehicles.

Even some of the longer-term contracts that we have seen recently had excess mileages of 55p.

We feel the provider not only was fair with the excess mileage charges, but they also gave you an option to increase your mileage at a lower rate mid-hire.

Your Questions Answered

Have you got a question regarding a car subscription that we can help with? All answers are based on our opinion but we are willing to help with most situations if we can. Just complete the form below and a team member will be in touch.

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Post Published: July 1, 2022
Post Last Updated: August 8, 2022
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